The idea behind it is that you promote other people’s products, often through an affiliate network, earning a commission if people actually end up buying, thanks to your marketing.

It’s based on revenue sharing. If you have a product and want to sell more, you can offer promoters a financial incentive through an affiliate program. If you have no product and want to make money, then you can promote a product that you feel has value and earn an income from it as an affiliate marketer.

I’ve talked a little about it before, but today I want to dive deeper into what affiliate marketing actually is, what sides there are to it and how to get started. So, let’s dive into my affiliate marketing guide. Ready?

Definitions

Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make.

However, Wikipedia talks about 4 different parties that are involved: the merchant, the network, the publisher and the customer.

I will explain all 4 parts in a second. But, when it comes down to the actual marketing, there are 2 sides of an affiliate equation: the product creator and seller and the affiliate marketer.

Therefore, affiliate marketing can be seen as the process of spreading product creation and product marketing across different parties, where each party receives a share of the revenue, according to their contribution.

It’s not just the promotion or just the product creation that define who you are as an affiliate marketer.

You can be both the creator and the marketer and still profit from the underlying idea of sharing revenue.

Now let’s look at all of the parts of a successful affiliate marketing system.

The Merchant: Sometimes also known as the creator, the seller, the brand, the retailer or the vendor. This is the party that creates the product. It can be a big company, like Dyson, who produces vacuum cleaners.

From solo entrepreneurs to startups to massive Fortune 500 companies, anyone could be the merchant behind an affiliate marketing program. They don’t even have to be actively involved, they just have to have a product to sell.

The Affiliate: This party is sometimes also known as the publisher. Affiliates can also range from single individuals to entire companies. An affiliate marketing business can produce a few hundred dollars in commissions each month or tens of millions of dollars.

It’s where the marketing happens. An affiliate promotes one or multiple affiliate products and tries to attract and convince potential customers of the value of the merchant’s product, so that they actually end up buying it.

They let the tracking system work in the background, where the customer can follow the purchase process just as usual and the affiliate still ends up being paid a commission.

The consumer will not typically pay a higher price to the affiliate marketer, as the cost of the affiliate network is already included in the retail price.

The Network: Only some consider the network part of the affiliate marketing equation. But, I believe that an affiliate marketing guide needs to include networks, because, in many cases, a network works as an intermediary between the affiliate and the merchant.

While you could technically promote an online course someone has created and just arrange a direct revenue share with them, letting a network such as ClickBank or Commission Junction handle the payment and product delivery puts a more serious note on your affiliate marketing.

Sometimes, affiliates have to go through a affiliate network to even be able to promote the product. For example, this happens if the merchant only manages their affiliate program on that network.

The affiliate network then also serves as a database of lots of products, out of which the affiliate marketer can choose which to promote.

In the case of promoting consumer products, like tools, books, toys and household items, the biggest affiliate network, by far, is Amazon. Their Amazon Associates affiliate program lets you promote any item that is sold on their platform.

Anyone can sign up and then generate a custom affiliate link to Amazon products. If someone purchases through your link, you earn a small commission.

With the basic terms clarified, let’s get an overview of how you can best get started with building your affiliate marketing business.

Overview

As I said, there are basically two sides of the affiliate marketing equation that you can choose from, assuming that you’re not going to build an affiliate network such as Commission Junction.

You can become a merchant and have others promote your product, in exchange for giving them a commission from the sales that they make.

Or, you can become an affiliate marketer for one or several products that you’d like to promote and market those to consumers, in order to make money.

While most people start by taking the affiliate route and it definitely is the easier path to take, building enough traffic to make a meaningful income just from affiliate sales isn’t quick or easy.

That’s why I’ll walk you through the 4 basic steps that you can take to get started for both sides of the affiliate marketing industry.

How to become a merchant in 4 steps

If you want to become an affiliate program merchant and then make money by having affiliates sell your product, there are 4 simple, yet not easy, steps that you can take.

First, you need to have a product idea. I’ll show you a few ways that you can generate those ideas, based off what’s already popular, in the next section.

Second, you have to validate your idea. You could just go ahead and build your idea. But, what if people don’t even want it? An idea is only good if people actually want it to come to life.

Third, you have to actually create the product. Since creating a physical product usually comes with huge investment and risks, I’ll only show you ways to create digital products. These are the best place to get started, since they typically only require your time and little or no money.

Also, once your product is created and released, you still need to find affiliates to promote your product and this is where affiliate networks can help.

Let’s go!

Step 1: Coming up with a product idea

People always say it’s hard to come up with an idea. It’s not. Ideas are easy.

But, if you think that your idea has to be super original and born out of the pure genius of your brain, that’s hard.

If you want to make money with an affiliate marketing business, you can’t be romantically attached to your idea.

Instead, just look at what products and services are already out there. Consider how you can improve upon them, by delivering something that solves the problems with those products.

You can, of course, always, choose a topic that you’re interested or involved in.

Imagine that you’re a housewife or a stay-at-home Dad, for a second.

Maybe you want to create a product that makes household chores easier. For example, you could look for a vacuum robot to get some ideas.

These are good starting points. Creating digital products is a lot easier, since it just takes time and sometimes a little financial investment, but usually not more than a service fee or a one-time price for software.

Once you have the product created and delivered to your initial buyers, it’s time to open up the affiliate network.

Note: A special kind of review, that usually does really well, is the comparison with a direct competitor.

You’ll soon find plenty of people who are already doing this. Just search for “best hair straightener,” and have a look:

This blog reviews flat irons for straightening hair (for women). How specific of a blog is that?

She can relate to the product, as she needs to straighten her own hair. And, if she does her research well, the blog not only ranks highly in the search engines, but also actually helps women to find the best tool for the job.

Whatever you’re reviewing, make sure that you do the same.

If your reviews aren’t genuinely helpful, people will sense, immediately, that you’re just trying to make a quick buck.

As Pat Flynn points out, in his affiliate marketing guide, involved affiliate marketing is by far the most profitable, because you can actually relate to the product, instead of just promoting something that might make you a lot of cash.

When you don’t even know the product, how can you credibly promote it?

Note: This is a little different for consumer products than it is for online courses or books created by individuals. If you’ve known a person for a long time and trust them and know their work is great, then that’s a different thing.

When you write reviews on your blog, you can use an affiliate link to link to the products that you promote.

You can recognize them on other blogs by the long “/ref…” tail, at the end of the regular link.

(how you know it’s an affiliate link)

This is usually the first step to start making commissions.

Simply sign up to Amazon Associates and you can then proceed to get your own affiliate link to any product on Amazon.

Just go to the product page and click on “Short link to this page.” You’ll get a link that’ll give you a commission if people purchase through it.

However, if you only rely on people using the affiliate links in your reviews, that means that you need lots of traffic to actually start making serious money.

But, if you find a way to contact your audience directly, you can market to them whenever you like, not just when they come to your website.

If you give your visitors 20 things to do, it’s unlikely that they’ll do anything at all.

Just have one call-to-action in your sidebar. Again, it should offer people something in exchange for their email address.

On Quick Sprout, we’re giving away the “Double Your Traffic” course and it has worked well.

Since you’re collecting email addresses around a very specific topic, such as finding the best straightening iron, juice maker, mini oven, etc., you don’t need a lot of them to make the email list worth your time.

Even with less than 500 people on your list, you can create significant sales.

Just make sure that you keep your audience engaged, by sending them regular updates, ideally once a week.

Don’t make it all sales. Just let them know when you have a new review up.

For example, I email out every single post that we do on Quick Sprout with a very simple description of what it’s about:

Every now and then, send them a specific call-to-action to buy a product. Perhaps you just found a new favorite in the latest review and think it’s really great.

You can update your audience on your change of mind, the reasons why and recommend that they switch to that product also.

But, there’s more. Once you have a few contacts on your email list, you can do this.

Step 3: Educate your audience with live webinars

Webinars are awesome.

Imagine that you want to buy a new fridge.

What makes you want to buy a fridge more:

Reading a review on a blog

Seeing a live presentation of a fridge in action

Number 2 of course!

Using a tool, like LeadPages, you can create a simple landing page where people can sign up for your webinar.

(I use LeadPages for my webinars, as well)

Promote your webinar on social media for a week in advance and get people to sign up.

Then, you can very easily host a Google hangout that is completely free, to stream your webinar live to your audience.

Imagine how fired up your audience will get when they see all of the cool things that your product will enable them to do.

Pointing to your affiliate link and sharing it at the end of the webinar is a soft sell and comes naturally, since you just spent an hour talking about the product.

It won’t feel forced and your consumers can still take all of the time that they want to make up their mind on whether they’ll actually purchase.

Pro tip: Can you get your merchant to give you a special deal for your audience? If you promise to get their product in front of a couple hundred people, they’ll often happily give you a discount or special bundle to further incentivize people to buy.

Step 4: Grow your business with PPC advertising

Once your affiliate marketing business starts to picks up steam, you can start thinking about paid advertising.

I’m not going to show you how to do it here, since I recently published a guide on both Facebook ads, as well as Google ads, but remember: only do this once you have a way of making back your money.

Conversions are all that matters here.

You can use PPC advertising to:

get people to sign up for your webinar

grow your email list

make more sales

For example, if you Google “learn leadpages,” you can see that LeadPages themselves are advertising for this keyword, running Google ads, promoting their weekly live webinar.

So, keywords related around learning about your product or topic would be a good start.

You can also target your competition. For example, right under the LeadPages ad, there’s an ad from Unbounce.

These guys also provide a software for creating landing pages, so it’s an easy way for them to get in front of someone else’s audience.

Now, while you could try to target people who are just trying to find a review of your product, you’d probably be better off improving your SEO.

The percentage of people who buy straight through your link after reading a review is naturally low, so imagine paying for these reads. Depending on the product price, you only get a few dollars or even cents per sale, so the margin you can spend on ads is not very big.

In most cases, your best off promoting sign ups to your email list.

As a matter of fact, getting people to sign up for a webinar with ads is the best way to go.

For example, John Lee Dumas, from Entrepreneur On Fire, often runs webinars and puts them right on his homepage.

As soon as you opt into the webinar, he also starts sending you a series of automated emails.

On those emails, he offers you other courses and free tools, like a webinar course, where you’ll learn how to do webinars to make sales.

If you opt into those, you’ll be sent 10 email lessons over several days. At the end, he invites you to buy a more extensive course on webinars.

After you’ve already learned a lot about webinars, you’re introduced to his more thorough and detailed course that’ll teach you even more.

He even shows a behind the scenes walk-through of the course, so you get a sneak peek.

Once he knows how many people will end up buying the full course from the autoresponder series, he can easily calculate how much he can spend on ads to get people to sign up for the webinar or webinar course.

So, with this strategy, you have several chances of getting your consumers to buy your product.

They have a chance to buy after the autoresponder series, on the webinar and from future emails.

When your sales start coming in from that many sources and begin to grow, that’s when you can really blow up your business with paid advertising by just driving traffic to the sales mechanisms that already work.

Conclusion

Time to recap. So, there are two ways to get started with affiliate marketing.

You can become a merchant or an affiliate.

The 4 steps of becoming a merchant are:

Coming up with a valid product idea.

Validating that idea by getting people to prepay you for the product.

Creating that product.

Finding affiliates, likely through an affiliate network, to partner with who will promote your product.

The more common and slightly easier route is becoming an affiliate. There are also 4 steps that you can follow:

Starting to review products in your niche

Building an email list

Using live webinars to educate your audience and make sales

Growing your affiliate business with PPC advertising

Affiliate marketing is a good way to get started with online marketing.

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Hey, I'm Neil Patel. I'm determined to make a business grow. My only question is, will it be yours?

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About Neil Patel

He is a New York Times best selling author. The Wall Street Journal calls him a top influencer on the web, Forbes says he is one of the top 10 marketers, and Entrepreneur Magazine says he created one of the 100 most brilliant companies. He was recognized as a top 100 entrepreneur under the age of 30 by President Obama and a top 100 entrepreneur under the age of 35 by the United Nations.